Terms of Reference

Context

The National Energy Board (the Board or NEB) is an independent
federal, quasi-judicial regulator of pipelines, energy development and trade,
with three key roles: adjudicating
energy projects, supporting the safety of Canadians and the environment through
oversight, and engaging Canadians on energy information. The Board regulates
pipelines and electricity transmission lines that cross inter-provincial or
international borders, which often involves multiple jurisdictions.

The Board has a legislated mandate to regulate
in the Canadian public interest. This means that it must factor economic,
environmental and social considerations into its decision-making process, as
well as matters with respect to Indigenous interests. The NEB also
regulates over the complete lifecycle of a pipeline project (from design
through to abandonment) using a wide variety of enforcement tools and
activities. This provides one-window for industry and stakeholders, and allows
for effective and consistent regulatory approaches at all stages of a project.

The Government has signaled a commitment to modernize the NEB, which
was reflected in the Minister of Natural Resources (NRCan Minister) mandate
letter where he was directed to: “Modernize the National Energy Board to ensure
that its composition reflects regional views and has sufficient expertise in
fields such as environmental science, community development, and Indigenous
traditional knowledge” and to work with Ministerial colleagues on a review of
federal environmental assessment processes.

Panel Mandate

The NRCan Minister will establish an Expert Panel (the
Panel) to conduct a targeted review of the NEB’s structure, role, and mandate pursuant
to the National Energy Board Act (NEB
Act). Specifically, the Panel shall:

Enable public participation and input on key
themes related to the review by ensuring this information is available on the
Panel’s website;

Provide opportunities for engagement, including
meetings with key stakeholders (e.g., industry associations, environmental
organizations and landowner groups) and the general public to enable the
participation of interested Canadians;

Engage national and regional Indigenous organizations,
groups, and communities (including First Nations, Métis and Inuit) to enable
their participation at regional and local levels;

Engage provincial and territorial governments to
solicit input on opportunities to modernize the NEB, including jurisdictional
considerations.

Work with regional Indigenous organizations in
the planning and hosting of Indigenous in-person engagement events; and

Prepare a report with respect to the review of
the NEB’s structure, role, and mandate that includes the Panel’s findings and
recommendations to modernize the NEB which would include potential legislative
amendments and a summary of the input received from the public, Indigenous
peoples and any other interested group or organization.

Scope of Review

Efforts to modernize the NEB will deal with a focused set of
issues related to the Board’s structure, role, and mandate pursuant to the NEB
Act. Specifically, these efforts will
aim to position the NEB as a modern, efficient, and effective energy regulator
and regain public trust.

NEB Modernization will involve engaging Canadians on reforms
to the NEB Act to position the Board to serve the interests of Canadians into
the future. Targeted engagement
activities will focus on key areas where there may be opportunities to
strengthen the NEB. For example, the
Panel shall review the structure, role, and mandate of other regulators (e.g.,
Alberta Energy Regulator) to identify potential best practices and guide its
review. The review may also validate
areas of strength within the NEB and confirm that actions underway (e.g., the Pipeline Safety Act coming into force)
are sufficiently robust. The focus of
NEB Modernization shall include:

1) Governance: the mandate
letter to the Minister of Natural Resources asks to ensure the Board’s
composition is diverse and has sufficient expertise in relevant fields such as
environmental science, community development, and Indigenous traditional
knowledge. Therefore, potential outcomes
could include findings and recommendations in the following areas:

Composition and expertise of Board members;

Governance and division of the NEB’s operational
and adjudicative functions, including the roles of the Board’s Chief Executive
Officer and Chair;

Role of the NEB in implementing Government
policies and priorities, including mechanisms for policy direction; and

Delegation of authorities to Board members and
senior NEB staff.

2) Mandate: Canada’s energy sector has
undergone significant changes in recent years due to technological innovations
and shifting global dynamics. Therefore,
potential outcomes could include findings and recommendations in the following
areas:

Defining and measuring public interest (e.g.,
consideration of national, regional,
Indigenous, and local interests as well as environmental, economic and social
factors);

Potential to clarify and expand the NEB’s
mandate with respect to collecting and disseminating energy data, information,
and analysis; and

Potential to expand the NEB's mandate (i.e., in
emerging areas such as offshore renewables and to support the transition to a
low carbon economy in light of Canada’s climate change commitments).

3) Decision-making Roles: Some stakeholders have expressed
differing views regarding the appropriate decision-making roles for the NEB,
Minister, and the Governor in Council regarding projects, licences, and
compensation disputes. Therefore,
potential outcomes could include findings and recommendations on whether to maintain
or revise the current approach with respect to who is making what decision.

4) Legislative Tools for Lifecycle
Regulation: To ensure that the NEB
is a modern, efficient, and effective energy regulator, its legislative tools
for lifecycle regulation must be comprehensive and robust. To date, there have been significant efforts
to optimize these legislative tools (e.g., coming into force of the Pipeline Safety Act). Potential outcomes could include findings and
recommendations with respect to the following areas:

5) Indigenous Engagement: Some Indigenous peoples have raised concerns regarding the nature and process of
their participation in different aspects of a federally regulated pipeline’s
lifecycle. Therefore, potential outcomes
could include findings and recommendations in the following areas:

Enabling early conversations and relationship
building between the Government of Canada and Indigenous peoples whose rights
and interests could be affected by a specific project under the NEB’s mandate;

Facilitating ongoing dialogue between the
Government of Canada and Indigenous peoples on key matters of interest on
projects to inform effective decision-making;

Further integrating Indigenous traditional knowledge
and information into NEB application and hearing processes; and

Developing methods to better assess how the
interests and rights of Indigenous peoples are respected and balanced against
many and varied societal interests in decision-making; and

Enhancing the role of Indigenous peoples in
monitoring pipeline construction and operations and in developing emergency
response plans.

6) Public Participation: Stakeholders have expressed increased
interest in the NEB’s activities, including hearing processes and in developing
emergency response plans. Potential
outcomes could include findings and recommendations in the following areas:

Identifying legislative changes to support
greater stakeholder and public participation in NEB activities (e.g., hearings,
developing emergency response plans, etc.) that would enhance the outcomes of
these activities.

Complementary Mandates

In addition to Natural Resources Canada's efforts to
modernize the NEB, Environment and Climate Change Canada is working to review
environmental assessment processes under the Canadian Environmental Assessment Act, 2012. Also, the Departments of Fisheries, Oceans
and the Canadian Coast Guard and Transport are working together to review
changes to the Fisheries Act and Navigable Waters Protection Act, restore
lost protections, and incorporate modern safeguards. In preparing for and undertaking the review,
the Panel shall take into account the activities associated with the other
mandated reviews, with the objective of sharing information received during the
respective reviews, where relevant, and coordinating review activities, to the
extent possible. If issues arise that fall beyond the scope of NEB
Modernization but are related to the other mandate reviews, the Panel shall
forward the matter to the appropriate secretariat or department. Participants who would like to participate in
the mandated reviews are not expected to duplicate efforts; a single submission
can be made to one or more reviews. The relevant information will be shared
with the appropriate review bodies with the consent of the participant.

Given that the North has distinct regulatory regimes
governed by different legislation and land claim agreements, matters related to
these regimes will not be explicitly reviewed by the Panel. However, the Panel
may take Northern approaches and frameworks into consideration in developing
its report and recommendations on the structure, role, and mandate of the NEB
pursuant to the NEB Act.

The Panel
shall, in reviewing the NEB structure, role, and mandate, consider the
relationship between NEB processes and the Aboriginal and treaty rights of Indigenous
peoples, as well as the relationship between NEB processes and the principles
outlined in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

The Review Process

The Panel

The Minister’s
selection of Panel members will be guided by the mandate letter commitment
related to the Board’s composition.
Therefore, in addition to having background in energy regulation, the Panel
should have sufficient expertise in
fields such as environmental science, community development, and Indigenous
traditional knowledge.

The Panel will consist
of five members, including two co-chairs.
In the event that a Panel member resigns or is unable to continue to
work, the remaining members shall constitute the Panel unless the Minister
determines otherwise. In such circumstances,
the Minister may choose to replace the Panel member.

By way of letter
from the co-chairs, the Panel may request clarification of or an amendment to
its Terms of Reference from the Minister. The Panel shall continue with its
review to the extent possible while waiting for a response in order to comply
with the timelines of these Terms of Reference.

The Panel shall
issue a notice to the public regarding any clarifications or amendments to its
Terms of Reference and shall make those clarifications and amendments available
on its website.

Upon appointment of
the Panel, the Panel shall be provided the comments received during the comment
period on the draft Terms of Reference. The input received through the online
questionnaire “Improving Canada’s Environmental and Regulatory Processes” will
also be provided to the Panel.

The NEB
Modernization Secretariat

A Secretariat consisting of NRCan and NEB officials will be
established within NRCan to provide administrative, technical, and procedural
support to the Panel. The Secretariat
will work closely with their counterparts in departments and agencies
conducting other mandated reviews to share information and ensure a coordinated
approach to communications and Indigenous engagement. Members of the
Secretariat shall be guided in their work and professional conduct by the
Values and Ethics Code for the Public Service.

Stakeholder Engagement

In collaboration with the Secretariat, the Panel will
develop a robust Engagement Plan that encompasses a wide-range of stakeholders
interested in providing input in the review.
The Panel shall directly engage with provincial and territorial
governments to obtain their perspectives on NEB Modernization.

The Panel will prepare a Public Engagement Plan outlining
how and when it will conduct public in-person events and other engagement
activities. In preparing the Plan, the
Panel will take into account the activities associated with the other mandated
reviews. This Plan will be posted on the Panel’s website. The Panel shall put procedures
in place to allow the public to input into the review in writing and/or
in-person and consider this input in the development of its report and
recommendations.

The results of stakeholder engagement activities shall be
made available on the Panel’s website.

Indigenous Engagement and Consultation

The Panel shall directly engage and consult with Indigenous
organizations, groups, communities and individuals during its review in order to
gain an understanding of issues and opportunities related to NEB activities.

The Panel shall prepare an Indigenous Engagement Plan, outlining how and
when it will conduct Indigenous in-person consultation activities. The Panel
shall engage with the leadership of National Indigenous Organizations in the
preparation of the Plan. In preparing
the Plan, the Panel shall take into account the activities associated with the
other mandated reviews. This Plan shall be posted on the Panel’s website. The
Panel shall work with regional Indigenous organizations in the planning and
hosting of Indigenous in-person consultation activities. The Panel shall also
include any procedures necessary for the timely and efficient conduct of these
activities. The Panel shall put a
process in place to allow Indigenous peoples to input into the review in
writing and/or in-person and consider this input in the development of its
report and recommendations.

The procedures will allow for the events to be open and to be conducted
in a manner that offers all participants an opportunity to provide input. The Panel shall ensure that a record of any
Indigenous in-person engagement event is created and posted on the Panel’s
website.

The Panel shall, where practicable, hold Indigenous in-person
consultation activities in regions or communities where project environmental
assessments have been recently conducted or where communities have expressed
interest in the review.

The Panel shall, where practicable, recognize and incorporate input and
information (i.e., traditional knowledge) from Indigenous peoples on their traditional,
cultural and rights-based practices in the review.

The Panel shall take into account the timing of traditional activities
in the local regions and communities when setting the time and location of
Indigenous in-person consultation activities.

Expert Advice

The Panel may retain the services of independent non-government experts,
such as establishing expert working groups, to provide advice or information on
certain subjects within its mandate. Any
advice or information provided to the Panel by those experts will be posted on
the Panel’s website.

Participant
Funding

Natural
Resources Canada is offering participant funding to Indigenous organizations,
groups, communities and individuals to support their participation in the
review.

Key
Deliverables

The Panel shall provide a report to the Minister of Natural
Resources that includes the following components:

An
executive summary;

The
findings, conclusions, recommendations, and rationale for the conclusions and
recommendations of the Panel with respect to the relevant issues within the
mandate provided to the Panel;

An
overall summary of the input received;

An
explanation of how the input was considered; and

The
report shall reflect the views of the Panel.

The Panel shall, on request of the
Minister, clarify any of the conclusions and recommendations set out in its
report.

Timeline

The Panel shall conduct its engagement activities commencing
in December 2016 and ending in March 2017.
The Panel shall complete its review and provide its report to the
Minister on or before May 15, 2017.

Outcome

The
results of this work will enable the development of potential legislative changes
related to modernizing the NEB. The
Prime Minister’s approval would be sought for proposals that engage his
prerogative for the machinery of government.

Official Languages

The final report and any other documents produced by the
Panel for public dissemination must be produced and made publicly available in
English and French. The Executive Summary of the final report will be made
available to the public on or before May 15, 2017 in both official languages
and the final report in both official languages as soon as possible thereafter.
Documents provided to the Panel will be made publicly available in the language
that they were received.

Confidentiality

All information gathered by the Panel in the course of its
work is subject to the provisions of the Access
to Information Act and the Privacy
Act.